|
on Labor Markets - Supply, Demand, and Wages |
| By: | Sona Badalyan |
| Abstract: | I study how delayed retirements reshape firms’ internal labor markets, leverag ing a German reform that raised women’s early retirement age by at least three years. The reform increased retention of older women and reduced both internal promotions and external hiring of younger coworkers. Spillovers are structured: promotion crowd-outs arise in thick internal labor markets with intense competi tion, while hiring declines are largest in thin external markets with high turnover costs. Crowd-out effects concentrate within jobcells, whereas coworkers in differ ent jobcells can benefit when retained older workers possess specific human capital. The evidence supports slot-constraint theories—augmented by firm-specific human capital mechanisms. |
| Keywords: | aging, internal labor markets, human capital, worker substitutability |
| JEL: | H55 J21 J23 J24 J26 J31 J63 M51 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_759 |
| By: | Westby, Samuel (Northeastern University); Modestino, Alicia (Northeastern University); Cheng, Peiran (Northeastern University) |
| Abstract: | Generative AI may change how firms define occupations. We study this process in software development, where large language models overlap with tasks commonly assigned to junior workers. Using the near-universe U.S. online vacancy data from Lightcast, we examine how the public release of ChatGPT changed entry-level software hiring standards. Event-study and difference-in-differences estimates show a 14–15 percent relative decline in junior versus senior software developer vacancies, larger than in related technical occupations and absent in mechanical engineering. A shift-share decomposition shows that rising experience requirements were driven primarily by employers asking for more experience within the same job titles, not by asking for a different composition of titles. Remaining junior vacancies shifted toward problem solving, communication, and attention to detail, not AI-specific skills. The results show how generative AI redefines entry-level work by raising the bar for what counts as a qualified junior hire. |
| Keywords: | generative AI, economics of information systems, labor demand, job vacancies, hiring standards, entry-level work |
| JEL: | J23 O33 J24 D83 M51 L86 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18723 |
| By: | Dennis Facius; Roberto Iacono |
| Abstract: | Does Generative AI displace early-career workers? We provide population-wide evidence from Norwegian administrative registers, 2015 through March 2025, exploiting the November 2022 release of ChatGPT as an availability shock. Using the within-firm composition difference-in-differences employed in recent work, supplemented with a synthetic difference-in-differences at the occupation level and a firm-level shift-share design, we find no robust evidence of employment displacement among young workers in highly AI-exposed occupations, nor any robust response across other age cohorts or on incumbent labor-market outcomes. While estimated coefficients for young workers are negative, in line with the existing literature, they are small and statistically insignificant. A backdating exercise on the synthetic difference-in-differences yields larger absolute estimates than the actual treatment date across most age bands. This suggests the apparent post-2022 decline reflects, at least in part, pre-existing secular trends rather than a clean AI-period break. |
| Keywords: | generative artificial intelligence, large language models, automation, labor demand |
| JEL: | J23 J24 J31 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12752 |
| By: | Diegmann, Andre; Müller, Steffen; Schoefer, Benjamin |
| Abstract: | We revisit the employer size wage effect (ESWE)—arguably the most basic and influential departure from the law of one price for labor. Our main result is that this canonical fact disappears completely across establishments within the same firm, even though they operate in different local labor markets. We uncover and dissect this fact by including a firm fixed effect in otherwise standard cross-sectional regressions of wages on establishment size. We implement this demanding specification in population-wide triple-linked firm-establishment-employee data in Germany. This result is new to the ESWE literature (for which our paper also provides the first systematic meta-analysis). This wage-size decoupling is hard to square with the view that employment is determined along a finitely elastic employer-specific labor supply curve—i.e., employers pay exactly the minimum needed for the quantity of labor, but no more—the foundation of the monopsony view. By contrast, large multi-establishment firms (MEF) appear to hire off their labor supply curves (or those curves are very elastic), pay wage premia above the monopsonistic minimum, and leave excess labor supply. We find some evidence for a reemergence of the ESWE within low-premium MEFs. Overall, at least for the 25% of German employment in large firms for which the ESWE disappears, wage setting and employment determination may be better accounted for by alternative models, namely accommodating above-market-clearing wage premia and rationing of labor supply, such as efficiency wage theories. |
| JEL: | J23 E24 J31 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21569 |
| By: | Adermon, Adrian (Institute for Evaluation of Labour Market and Education Policy (IFAU)); Ek, Simon (Institute for Evaluation of Labour Market and Education Policy (IFAU)); Graetz, Georg (University of Edinburgh); Yakymovych, Yaroslav (Uppsala University) |
| Abstract: | We jointly estimate growth in occupational wage premia as well as time-varying occupation-specific life-cycle profiles for Swedish workers 1996–2013. Our novel identification strategy is based on re-centering of life-cycle profiles around their flat spot. We document a substantial increase in between-occupation wage inequality due to differential growth in premia, and show that changes in worker composition partly counteracted this trend. The association of wage premium growth and employment growth is positive, suggesting that premium growth is predominantly driven by demand-side factors. We also find that wage growth due to occupation-specific skill acquisition was more dispersed in the early years of the sample period. Our results are robust to varying the assumed flat spot over a reasonable range, as well as to allowing for occupation-level changes in returns to cognitive and psycho-social skills. The results suggest that Swedish wage setting institutions have not prevented wages and quantities from adjusting to technological change or consumer demand shifts. |
| Keywords: | wage growth, inequality, occupational mobility |
| JEL: | C23 J24 J31 J62 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18710 |
| By: | Lindenlaub, Ilse; Oh, Ryungha; Rodriguez, Maria Alejandra; Veldkamp, Laura |
| Abstract: | We document and explain the gap between measures of AI exposure and measures of AI adoption in the workplace. This leads us to propose a new AI adoption index based on comparative advantage. Using the representative German DiWaBe employee survey linked to worker and establishment information, we compare worker-reported AI use to prominent exposure measures and find that the relationship is weak. Motivated by this gap, we develop a framework in which adoption depends not only on technical feasibility—AI’s absolute advantage measured by exposure—but also on profitability—AI’s comparative (dis)advantage relative to a specific worker—balancing AI productivity against AI user costs and worker productivity against wages. We operationalize this framework at the task level by (i) estimating worker productivity relative to pay, (ii) mapping exposure indices into AI productivity, and (iii) inferring task-specific AI user costs from revealed-preference adoption. The resulting occupation-level index accounts for 60% of the cross-occupation variation in observed AI adoption, compared with 14% for an exposure-only model. The two approaches diverge substantially for approximately 30% of workers, highlighting that comparative advantage—not exposure alone—is crucial for assessing AI’s labor-market impact. |
| Keywords: | Artificial intelligence; Comparative advantage; Technology diffusion; Worker productivity |
| JEL: | E24 D24 J24 O33 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21589 |
| By: | Lorenzo Navarini |
| Abstract: | While social skills have become increasingly important in the labour market, other skills may have lost relevance. Estimating these changes is challenging because skills measured before tertiary education affect wages both directly and indirectly through educational sorting. This paper develops a sequential model with cognitive, social, and diligence skills measured at age 17 to estimate direct and total early-career returns across recent German cohorts, while accounting for unobserved ability. Direct returns to social skills increased by 6 percentage points, whereas total returns to diligence declined. Among individuals with low cognitive skills, returns to diligence fell by 10 percentage points, consistent with high-diligence workers sorting into routine-intensive occupations whose value declined under deroutinisation. |
| Keywords: | Multidimensional skills; returns to skills; dynamic treatment effects |
| JEL: | J24 I21 I26 O33 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26170 |
| By: | Abel, Martin (Bowdoin College); Dawi, Raghad (Bowdoin College); Lenk, Tyler (Bowdoin College); Singer, Aidan (Bowdoin College) |
| Abstract: | How do workers respond when artificial intelligence replaces human judgment in evaluating prosocial work? Partnering with a non-profit addressing food insecurity, we recruit 1, 491 U.S. volunteers to write fundraising messages and cross-randomize evaluation by humans versus AI and the presence of performance pay. AI evaluation reduces effort by 11–14 percent among volunteers with low commitment to the cause, while having no effect on those strongly aligned with the mission. Performance pay fails to mitigate these adverse effects. Workers perceive AI as less effective at identifying quality, which appears to be the primary mechanism, and as less fair and transparent than human evaluation. Introducing an AI algorithm that explicitly applies human evaluation criteria does not mitigate these negative effects, suggesting that resistance to AI evaluation reflects deeper skepticism about machines' capacity for subjective judgment. |
| Keywords: | algorithm aversion, algorithmic management, artificial intelligence, intrinsic motivation, worker effort |
| JEL: | J24 M54 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18678 |
| By: | Daniel Goller; Enzo Brox; Stefan C. Wolter |
| Abstract: | Why do people sort into poorly fitting occupations? This paper shows that imperfect self-knowledge about skills is an important source of skill mismatch at labor market entry. We use unique data from standardized professional aptitude tests linked to administrative records on educational trajectories and early labor market outcomes in Switzerland. The data allow us to observe objective skills and subjective skill beliefs for many productivity-relevant skills in a high-stakes setting. We document large differences among individuals in how well their beliefs align with their skills. Imperfect self-knowledge predicts misaligned occupational aspirations, higher realized skill mismatch, and a higher probability of dropout. Guided by a Roy-style model of occupational choice with imperfect self-knowledge, we interpret these findings as evidence that distorted self-assessments at the school-to-work transition contribute to the misallocation of talent. |
| Keywords: | Information frictions, Occupational choice, Skill mismatch, Self-knowledge |
| JEL: | D83 J24 J41 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26166 |
| By: | Möller, Joachim (University of Regensburg and Institute for Employment Research (IAB), Nuremberg) |
| Abstract: | During and after World War II, West Germany absorbed around eight million refugees and displaced persons, including nearly two million children. This provides a natural experiment to examine whether birthplace characteristics exert persistent effects on later labor-market outcomes. Using administrative labor-market biographies for the 1935–1950 birth cohorts combined with geocoded information on birthplaces and workplaces, we find that birthplace urbanicity is strongly associated with later labor-market outcomes not only among both native-born individuals but also among expellees. Individuals originating from urban regions earn systematically higher daily wages than those born in rural areas, even after controlling for workplace region, education, and occupation. Among displaced individuals, the effects are considerably stronger for women than for men and are especially pronounced for expellees from the Czech lands. The findings suggest that urban-origin advantages were transmitted across generations through education, occupational sorting, and family-specific social and cultural capital. |
| Keywords: | urban origins, forced migration, birthplace effects, lifetime earnings, labor-market outcomes, regional mobility, gender differences, intergenerational transmission |
| JEL: | R12 R23 J24 J61 N34 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18725 |
| By: | Loukas Karabarbounis |
| Abstract: | Micro estimates of the Marshallian elasticity of labor supply are small and typically positive, whereas cross-country and time-series patterns of hours imply a strong negative relationship between wages and hours. I reconcile these two apparently contradictory observations using a single utility specification and taking into account heterogeneity in non-labor income. Micro estimates condition on non-labor income, while macro variation allows capital income to adjust alongside labor income, which strengthens the income effect. A model with heterogeneous households and exogenous capital income yields closed-form expressions in which the distribution of the labor share shapes the gap between the micro and the macro elasticities. A cross-sectional regression of hours on wages that conditions on the labor share recovers the macro elasticity. A dynamic model with heterogeneous households and incomplete asset markets reproduces both elasticities as outcomes when disciplined by joint moments of wages, hours, consumption, and wealth. The income effects that bridge the gap between the two elasticities imply marginal propensities to earn that lie in the range of estimates of micro studies on lottery winners. |
| JEL: | E21 E24 J22 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35329 |
| By: | Savinee Mega; Kanyaphak Ngaosri; Worawan Chandoevwit |
| Abstract: | In Thailand, the Mandatory Retirement Age (MRA) is governed by law; however, private corporations may implement their own specific retirement thresholds. The public sector enforces an MRA of 60, but private companies may set at 55, aligning with the Social Security Retirement Age. Understanding how these varying institutional constraints shape individual labor supply decisions is critical for effective policy planning in an aged society like Thailand. Therefore, this study investigates the factors influencing the Expected Retirement Age (ERA) and Expected Working Hours (EWH) among Thailand’s pre-retirement formal-sector workforce aged 50–60. Using survey data from 1, 573 employees across four regions, the analysis employs interval regression for the ERA model and Ordered Probit and Tobit models for the EWH model. The findings reveal that enforcement of an MRA is a primary determinant of retirement timing: employees subject to an MRA expect to retire significantly earlier and reduce their working hours more sharply as they approach the retirement threshold. Rather than an abrupt exit, the data show a clear pattern of expecting a gradual reduction in work intensity as workers age. Employees in elementary occupations expect to retire later and work longer hours, while those with access to stable pension benefits expect earlier retirement and fewer working hours. The study recommends reforming mandatory retirement regulations to permit voluntary employment extensions and promoting phased retirement schemes that allow a gradual reduction in working hours. |
| Keywords: | Expected retirement age; Expected working hours; Mandatory retirement age; Older workers; Phased retirement; Labor supply; Aging workforce |
| JEL: | J14 J22 J26 J38 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:pui:dpaper:255 |
| By: | Laliberté, Jean-William (University of Calgary); Whalley, Alexander (University of Calgary) |
| Abstract: | We use matched parent-child-employer-employee data from Canada, linked to detailed educational records, to quantify the contribution of social connections to employers to intergenerational income mobility. Sorting across employers accounts for roughly a third of the transmission of income across generations. To estimate the impact of social connections on differential representation across employers, we compare classmates -- those with the same degree from the same institution -- who have different social connections. We find social connections in the labor market explain about 15% of the firm-sorting component of the intergenerational income rank-rank relationship, about a third the explanatory power of education. |
| Keywords: | social connections, intergenerational mobility |
| JEL: | J62 J31 J24 L25 E24 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18691 |
| By: | Theodoropoulos, Nikos (University of Cyprus); Singleton, Carl (University of Stirling) |
| Abstract: | This paper assesses the empirical evidence on returns to employer tenure. Using published studies and new illustrative estimates from British linked employer–employee payroll data, we show that estimated wage–tenure profiles vary substantially across data sources, wage measures, samples, and empirical specifications. We argue that this reflects a deeper issue: tenure coefficients should not be interpreted mechanically as causal returns to firm-specific human capital, since they may capture broader features of the employment relationship and the wage-setting environment. The literature on returns to tenure is best understood as delivering context-dependent empirical parameters, rather than convincing evidence for a single stable causal effect of remaining with the same employer. |
| Keywords: | Seniority, Wages, Employer-employee data, Mincer wage equation |
| JEL: | C23 J31 J63 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18705 |
| By: | Alam, Afroza; Diegmann, André |
| Abstract: | This paper provides new causal evidence on how patent allowances affect firms and their employees based on quasi-random assignment of patent applications to examiners. Exploiting employer-employee records with newly linked German firm data and web-scraped patent documents, we show that patent-induced shocks reduce firm exit, improve productivity, and increase wages, with rent-sharing elasticities between 0.10 and 0.21. Wage gains are broadly observed across occupational tasks, with high heterogeneity: managers benefit disproportionately in publicly traded firms, whereas broader wage increases accrue to workers in non-traded firms. Our findings highlight the role of institutional features and firm organization in shaping how rents are shared. |
| Keywords: | firm performance, innovation, rent sharing, worker compensation |
| JEL: | D22 J31 O31 O34 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwhdps:341391 |
| By: | Lieke Voorintholt (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University); Annalisa Tassi (Research Institute for the Evaluation of Public Policies of the Bruno Kessler Foundation (FBK-IRVAPP)) |
| Abstract: | In recent decades, volunteering has expanded from completely unpaid work to the possibility of receiving a small (tax-free) monetary compensation for the activity performed, with the goal of stimulating these activities. Since the relationship between monetary compensation and prosocial behavior may differ from standard labor market settings, the effectiveness of monetary and tax incentives in this context is an empirical question. Using data from German income tax returns, this paper investigates the effects of changes in monetary compensations on the duration of voluntary work, donations, and market labor income of paid volunteers. Our empirical analysis leverages a German policy change from 2013 that increased the tax-free threshold for volunteer compensations. Following a difference-in-differences approach in combination with a duration model, we do not find evidence that affected volunteers change the number of years they spend in a certain volunteer position. Our results also show that the compensation increase has no spillover effects on labor earnings or donations. Combining our null findings and insights from our theoretical model, we suggest exploring non-incentive-based measures rather than higher compensations to stimulate paid volunteering. |
| Keywords: | Paid volunteering, volunteer duration, tax-free compensation, policy change, labor supply, donations |
| JEL: | D11 D12 D64 H24 J22 J38 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:iaa:dpaper:202605 |
| By: | OECD |
| Abstract: | Veneto is one of Europe’s manufacturing powerhouses, generating 9.5% of Italy’s GDP. While labour productivity growth has been slower than in peer regions since 2005, the region has maintained international competitiveness, supported by contained labour costs and high employment rates. The analysis highlights opportunities to raise productivity by further developing high value added activities, including by strengthening links between manufacturing and services and by expanding private business investment. There is scope for improving skills matching, notably in STEM fields, leveraging the strong enrolment of local students in those subjects. Veneto’s labour market is also gradually adapting to the green transition, with around 30% of recent job postings involving green tasks |
| Keywords: | drivers of productivity, international comparison, labour market policies, manufacturing servitisation, skills, SMEs, subnational productivity |
| JEL: | D24 J21 J24 L11 O3 O47 R11 |
| Date: | 2026–06–25 |
| URL: | https://d.repec.org/n?u=RePEc:oec:cfeaaa:2026/10-en |
| By: | Roisin O'Neill; Shailee Manandhar; Douglas L. Kruse |
| Abstract: | People with disabilities are disproportionately represented in low-wage work, raising concerns that higher wage floors may reduce their employment opportunities, particularly for workers with more severe disabilities. We examine the effects of state minimum wage increases and state subminimum wage terminations on employment outcomes for people with disabilities using American Community Survey data from 2010–2023. We find little evidence that minimum wage increases reduce employment or labor force participation among people with disabilities, including those with more severe disabilities. While many estimates are statistically imprecise, confidence intervals generally rule out economically meaningful negative employment effects. We likewise find no evidence that terminating subminimum wages reduces employment opportunities for affected workers, and some estimates suggest positive employment effects for groups most likely to have been employed under subminimum wage arrangements. These gains may reflect complementary policies that often accompany repeal, such as Employment First initiatives. Overall, the results provide little support for the view that higher wage floors create disproportionate employment barriers for people with disabilities. |
| JEL: | J14 J21 J38 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35368 |
| By: | Lukas Althoff; Hugo Reichardt |
| Abstract: | Artificial intelligence (AI) reshapes workers’ comparative advantage by altering the tasks they perform and the skills those tasks require. We develop a dynamic task-based model to quantify the general-equilibrium effects of task-specific technical change. Workers have multidimensional skills, choose occupations, and accumulate skills on the job; occupations combine tasks, and productivity depends on how workers’ skills match task requirements. We develop a computationally efficient procedure to estimate the model using panel data and a new database of task-level skill requirements. We apply the model to AI, allowing it to augment, automate, and simplify tasks. We find that AI narrows wage inequality and raises average wages across scenarios ranging from slow to rapid AI progress. The key equalizing force is simplification: by lowering tasks’ skill requirements, AI lets lower-skill workers compete for previously inaccessible jobs. Adoption costs, highest for lower-skill workers, dampen but do not eliminate the decline in inequality. |
| JEL: | C6 C8 D2 D58 E20 J20 J3 J6 O3 O4 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35353 |
| By: | Krzywdzinski, Martin |
| Abstract: | This paper investigates how software developers perceive the current and future automation of their work in the context of rapidly advancing generative and agentic AI. While existing research has primarily focused on productivity effects of specific AI coding tools in experimental settings, less is known about the broader organization of software-development work, the limits of automation, and developers' own expectations regarding labor-market outcomes. The paper addresses four research questions: the current level of automation across software-development tasks and occupations; expectations regarding future automation and its drivers; structural limits to automation; and perceived implications for job security, employability, and income. The analysis draws on an original survey of 1, 731 software developers from eleven countries and six professional subgroups. The findings show that software development is currently characterized by moderate automation across all task domains, with humans still central to planning, coordination, and problem-solving. Respondents expect substantial increases in automation over the next five years, driven primarily by generative and agentic AI. However, the study also identifies important limits to automation: as automation increases, remaining tasks become less standardized, while problem-solving and collaboration demands persist. Finally, most developers remain cautiously optimistic about their labor-market prospects, although workers already operating in highly automated environments express significantly greater concerns about future job security. |
| Keywords: | automation, artificial intelligence, skills, work organization, software development, programming |
| JEL: | J22 J24 J44 L86 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:wzbgwp:341630 |
| By: | Diego A. Comin; Ana Danieli; Martí Mestieri |
| Abstract: | We study labor-market polarization by developing a framework with heterogeneous consumers, non-homothetic preferences, and endogenous labor supply a la Roy (1951). Because income-elastic sectors are intensive in high- and low-skilled occupations, shocks that raise either the average or the dispersion of income across households shift relative labor demand toward these occupations, generating an income channel to polarization. We quantify this channel by comparing the effect of shocks that affect the distribution of household income in our model and in a version with homothetic preferences in which the income distribution does not affect sectoral composition. The income channel is sizable: it explains 42% and 210% of the increases in the relative wages of high- and low-skill workers observed between 1980 and 2016, and 26% and 51% of the increase in their hours-worked shares. A quarter of its effect operates through income dispersion, highlighting the importance of departing from representative-consumer frameworks in non-homothetic environments. |
| JEL: | E21 E23 J23 J31 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35315 |
| By: | Samantha Horn; Peter Schwardmann; Egon Tripodi |
| Abstract: | Evaluative social interactions are pervasive in labor markets. Inequality in these settings can arise not only from how individuals are treated or perform when evaluated, but from whether they enter evaluation at all. We study these margins in the context of social anxiety. In a controlled online experiment (N = 922), applicants decide whether to complete a live video interview that determines a monetary hiring bonus. We find that inequities associated with social anxiety are concentrated in participation rather than in performance or treatment. Socially anxious applicants are substantially less willing to interview, hold more pessimistic beliefs about being hired, and correctly anticipate a worse experience. Yet they perform no worse and are evaluated no differently. Interview experience does not attenuate the relative pessimism of socially anxious individuals, a pattern that is inconsistent with Bayesian updating under comparable signals. We use our rich audio-visual data and open-ended reflection texts to show that, instead, socially anxious applicants interpret similar interactions more negatively. We then provide evidence on organizational interventions aimed at closing social anxiety gaps. Finally, we show that social anxiety explains a meaningful share of inequalities commonly attributed to gender and social skill differences and is associated with significant earnings gaps in national data. |
| Keywords: | social anxiety, job interviews, beliefs, mental health, discrimination, learning |
| JEL: | D83 J71 I10 C90 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12722 |
| By: | Bence Bardóczy; Gideon Bornstein; Sergio Salgado |
| Abstract: | This paper studies how labor market power affects the transmission of monetary policy. Using administrative U.S. Census data, we show that firms with high monopsony power—defined as those accounting for over 10 percent of the local wage bill—respond less to monetary policy in terms of their wage bill and employment. We then develop a New Keynesian model with heterogeneous firms and oligopsonistic competition to interpret these findings. Wage stickiness combined with firms’ labor market power is key to generating the heterogeneous responses that we document. Our model highlights two channels through which oligopsony shapes the aggregate effects of monetary policy: partial passthrough and misallocation. Calibrated to U.S. labor markets, the model implies that the decline in labor market power since the 1980s has increased the output response to monetary policy by about 10 percent and accounts for about 15 percent of the estimated flattening of the Phillips curve. |
| JEL: | E0 E31 E52 J42 L13 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35335 |
| By: | Chang, Eunsik (Mississippi State University); Padilla-Romo, María (University of Tennessee); Peluffo, Cecilia (University of Florida) |
| Abstract: | This paper estimates the effects of early academic rank in elementary school on later cognitive and noncognitive outcomes in the context of Mexico. We use linked administrative records to compare students with similar third-grade achievement but different ordinal positions. These rank differences arise from idiosyncratic variation in the achievement distributions of elementary-school cohorts. We find that a higher third-grade rank increases performance on a high-stakes high school admission exam. Both broader school-cohort rank and classroom rank contribute to this achievement gain when estimated jointly. Higher rank leads to more selective high school choices and improves self-reported measures of self-perception, academic aspirations, classroom responsibility, learning strategies, and teamwork attitudes by the end of ninth grade. We also provide evidence that higher elementary school rank improves students' high school placement outcomes. |
| Keywords: | school-cohort rank, classroom rank, high-stakes test scores, noncognitive skills |
| JEL: | I21 I25 J24 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18683 |
| By: | Lukas Althoff; Christiane Szerman |
| Abstract: | The World War II GI Bill was the largest education subsidy in US history and a cornerstone of the postwar US transition to a knowledge economy. Although formally race-blind, the program's decentralized administration left implementation to local officials and segregated institutions, with sharply different consequences for Black and white veterans. This paper quantifies the GI Bill's impact on Black and white Americans' economic outcomes across two generations, using a regression discontinuity around WWII service eligibility cutoffs and a new data linkage from veterans in the 1940 and 1950 censuses to their sons' neighborhood outcomes between 1990 and 2025. The GI Bill widened racial inequality, doubling white veterans' college completion while steering Black veterans into often-fraudulent vocational programs with no earnings returns. The disparities persisted across generations, increasing the white-Black gap in sons' adult-neighborhood outcomes, including a 5-percentage-point (47 percent) widening of the racial college gap. Unequal returns to the same eligibility account for the intergenerational gap, with no contribution from prewar differences in socioeconomic status or geography. In sum, access to the GI Bill was not nearly the same economic opportunity for Black Americans as it was for white Americans, highlighting that race-blind policy does not guarantee racial equality. |
| Keywords: | GI Bill, racial inequality, intergenerational mobility, higher education, returns to education, discrimination, race-blind policy, economic history |
| JEL: | N32 I24 J15 J62 I22 I26 J71 H52 N42 J24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12739 |
| By: | Mehrotra, Santosh (Higher School of Economics); Singh, Ashutosh (National Skills Development Corporation) |
| Abstract: | Under what institutional conditions do qualifications frameworks become trusted mechanisms for learner progression, mobility, and labour-market signalling? This paper addresses this question for India by analysing the India’s National Skills Qualification Framework (NSQF) and the emerging National Credit Framework (NCrF). It argues that the NSQF, introduced in 2013, created a common classification of qualifications but could not become a trusted framework because assessment, certification, quality assurance, and employer recognition remained weak. Its limitations were therefore structural. The NCrF seeks to integrate school education, higher education, vocational training, and experiential learning through a unified credit system. Thus, India has moved from a single qualifications framework to a broader qualifications architecture now emerging. Alignment between NSQF and NCrF creates a 13-level progression system, rather than the eight-level structure commonly associated with NSQF. Drawing on international experience, it concludes that qualifications reforms succeed not through framework design but through trusted certification, clear progression pathways, and employer acceptance. |
| Keywords: | India, National Credit Framework, qualifications frameworks, TVET, learner mobility, skills certification, New Education Policy, European Qualification Framework, Skills |
| JEL: | I21 I25 J24 O15 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18709 |
| By: | Shan Huang; Renke Schmacker; Hannes Ullrich |
| Abstract: | AI can raise productivity by extracting information from rich data, yet little is known about how experts weigh AI-generated signals against established decision-support tools. We conduct a nationwide survey experiment with 372 Danish primary care physicians (21.5% of all clinics), who make diagnostic and treatment decisions on urinary tract infection vignettes before and after receiving a diagnostic signal. Holding accuracy constant, we randomize between-subjects whether the signal appears as an AI prediction or a commonly used dipstick test result. Physicians update beliefs 41% less in response to AI than to dipstick signals, consistent with AI skepticism. Roughly one-third of physicians ignore the AI tool; linked administrative data show that these non-adopters resemble adopters on a range of observables, including clinical practice and prescribing measures, except for lower baseline technology use at their clinics. When physicians use the AI tool, they ignore asymmetry in informativeness between positive and negative signals and, when shown both the AI and a redundant signal, exhibit correlation neglect. These frictions in information processing lead to increased antibiotic prescribing with the AI signal. Our findings highlight the importance of training and information design for AI implementation. |
| Keywords: | expert decision-making, artificial intelligence, healthcare, mental models |
| JEL: | I11 D81 D83 J24 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2168 |
| By: | Kochems, Johannes; Schmidhäuser, Jakob |
| Abstract: | This paper analyzes the local economic impacts of troop deployments. We exploit variation from the historic large-scale US troop withdrawal from Germany triggered by the end of the Cold War, to estimate the effect on local labor markets and public finances. We use administrative data provided by the US Department of Defense to quantify the size of the troop withdrawal at the municipal level. Using a synthetic difference-in-differences estimator, we find negative effects on local labor markets: for each withdrawn US soldier, the number of local jobs decreases by 0.53. The decrease in economic activity results in a reduction of revenues which municipalities balance by lowering their expenditures, while increasing business and property tax multipliers. In individual-level analyses, we document that workers displaced by the closure of a US military base have persistently lower employment rates. Moreover, their daily wages remain around 9.2 percent lower fifteen years after the layoff. The negative impact on labor outcomes is particularly pronounced for women, older workers, and those employed in regions with more unfavorable initial labor market conditions. |
| Keywords: | military base closure, local labor markets, worker displacement, fiscal multipliers, spatial spillovers, public finance |
| JEL: | J21 J23 J63 H56 H71 H72 R11 R51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:341412 |
| By: | Maryam Farboodi; Andrew J. Koh; Anchi Xia |
| Abstract: | We build a dynamic model of data-driven automation in which data (i) is heterogeneous and task-specific; (ii) accumulates endogenously as a byproduct of economic activity; and (iii) exhibits spillovers such that data generated by one task can augment the productivity of another. Along the transition path of automation, data plays a dual role in simultaneously augmenting the productivity of already-automated tasks and expanding the automation frontier. We derive tight conditions for the economy to be partially versus fully automated in the long-run. In the latter case, automation exhibits rich short-run dynamics that depend on the pattern of data spillovers but is always slow in the long-run: the share of tasks produced by labor decays asymptotically as a power law in time. We show that the economy is generically inefficient and analyze how a planner optimally tilts the direction of data accumulation. With endogenous capital accumulation, data-driven automation generates explosive growth but stagnant long-run wages. |
| JEL: | J31 O33 O4 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35320 |
| By: | Remy Levin; Daniela Vidart |
| Abstract: | Male labor force participation has declined steadily for 50 years in the United States. We show that one cause has been changes in men's beliefs about the returns to work, shaped by lifetime experiences of the aggregate male labor market. We find that experience effects on participation persist for men who move across state lines, are stronger for same-race male experiences, and are driven by formative childhood years. We also document effects of experiences on direct measures of labor market expectations. Our findings suggest that experience effects can turn short-run declines in labor demand into long-run declines in labor supply. |
| JEL: | D83 E24 J22 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35327 |
| By: | Liang Chen; Tse-Chun Lin; Fei Wu; Xingjian Zheng; Eric Zou |
| Abstract: | The emergence of wearable electroencephalography (EEG) technologies presents new opportunities to identify and quantify neural correlates of decision-making in real-time, financially consequential settings. We report a field study in which we use wearable EEG devices to record brainwave activity from professional day traders during real-world, high-stakes trading. Using these signals, we construct an established psychophysiological Engagement Index (EI), which is defined as beta wave power divided by the sum of alpha and theta wave power, and document clear spike-and-decay patterns around trade execution. Linking EI dynamics to trading performance, we find that more successful trades are preceded by larger EI spikes in the 30 seconds before execution, while baseline or background EI levels have no predictive power and, if anything, are negatively associated with performance. We further show that higher EI is associated with attenuated behavioral biases in trading, including the round number heuristic and the disposition effect. |
| JEL: | C80 C89 D91 G11 G41 J24 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35345 |
| By: | Anna Bindler; Barbara Boelmann; Lena Janys and Luisa H. Santiago Wolf |
| Abstract: | How do labor demand shocks affect workforce diversity in the absence of targeted diversity policies? A conceptual framework illustrates the potential trade-off between the demographic and quality composition of a workforce when there is a positive labor demand shock. Exploiting the German reunification as a natural experiment, we analyze the academic labor market where nearly all social sciences professors in East Germany were replaced while STEM faculty remained largely unchanged. Using administrative data and a regional difference-in-differences design, we find increased dispersion in the institutional quality of hires, indicating that the new hires came from less select departments. At the same time, female representation did not increase despite qualified women in the pipeline. Instead, East German hiring patterns converged to those in West Germany in terms of gender composition. In simulations, we investigate implied losses: Under conservative assumptions, we show that, considering the pipeline of qualified applicants, the marginal female hire’s quality is approximately half a standard deviation higher than the marginal male hire’s quality. |
| Keywords: | Labor demand, diversity, higher education, universities |
| JEL: | I23 J23 J45 J70 J82 N34 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2169 |
| By: | Omar Bamieh; Juan J Dolado; Álvaro Jáñez; Felix Wellschmied |
| Abstract: | Chile's 2022 Platform Work Law mandates firms to monitor their subcontractors' formality and establishes maximum working hours, minimum pay, and the right to collective bargaining among independent contractors. Chile further stands out worldwide for providing a comprehensive and nationally representative dataset for platform work that allows us to track workers' labor market outcomes over 2020-2024. By means of DiD and event study regressions, we find that this reform induced an 8-percentage-point shift from the share of informal to formal subcontractors with no change in the share of employees. Moreover, there were no significant changes in collective bargaining, compliance with minimum pay and maximum hours, or wage differentials between employees and subcontractors. The changes in hiring practices and wages are consistent with a structural labor market model where firms hire employees and formal and informal subcontractors. The calibrated model also shows that the reform reduced platforms' profits, while strictly enforcing hours regulations would lead to very small welfare losses. |
| Keywords: | Platforms, Subcontractors, Employees |
| JEL: | J21 J60 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26159 |
| By: | Pineda-Hernandez, Kevin (Free University of Brussels); Rycx, François (Free University of Brussels); Senterre, Thomas (ULB and UMONS); Volral, Melanie (UMONS) |
| Abstract: | Although educational attainment is known to moderate immigrant-native wage gaps, the role of the field of study remains largely unexplored. Drawing on detailed data for master's graduates in Belgium (1999-2016), we show that the immigrant-native wage gap narrows over two generations but persists in higher-paying fields (STEM, LEM), while disappearing in lower-paying ones. Wage decompositions reveal a small positive quantity effect (immigrants favour higher-paying fields), outweighed by a negative price effect (as returns to fields are lower for immigrants). This price effect halves across generations. Together, both effects explain 28-37% of the overall pay gap. Sensitivity tests refine these findings. |
| Keywords: | immigrant-native wage gap, first- and second-generation immigrants, field of study, matched employer-employee data |
| JEL: | I23 I24 I25 I26 J31 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18728 |
| By: | Ricardo Dahis |
| Abstract: | This paper documents new facts about concentration in publishing in economics. First, the profession grows downward . The number of economists grew almost sixfold since 1990, but new entrants publish in lower-tier journals while incumbents hold the top. Second, there is high and persistent concentration at the top. Along with the downward growth, the top-1% authors accounted for 38.4% of top-5 publication credit in 1990 and for 78.3% in 2025. Third, the persistence is widespread within cohorts, within subfields, and within gender. Fourth, new journals only slightly dilute concentration. Fifth, elite authors diversify on topics faster than the rest of the profession. We interpret the findings with a screening model of attention under information overload. The evidence is consistent with the model: as the field grows, citations concentrate on established work and the conditional citation premium of top-author papers narrows. |
| Keywords: | economics of science, publishing, concentration, entry, coauthorship, scientometrics |
| JEL: | A11 A14 I23 J24 O33 |
| Date: | 2026–06–08 |
| URL: | https://d.repec.org/n?u=RePEc:mos:moswps:paper_1781831602928_319 |
| By: | Sun, Meiping (Shandong University of Finance and Economics); Yang, Yiying (Fordham University) |
| Abstract: | This paper examines the long-term and multi-generational benefits of skilled birth attendance (SBA), which involves having a trained midwife or doctor present at delivery to safely perform normal deliveries using aseptic techniques and provide first-line emergency obstetric care. Using data on the county-by-county rollout of SBA in China from the 1930s to the 1970s, our research first demonstrates that the SBA reform substantially reduced neonatal mortality. We then show that exposure to skilled delivery during birth leads to a 1.5% increase in adult income. Moreover, we discovered that the benefits of exposure to SBA in previous generations extend to subsequent offspring. Children with at least one parent who experienced SBA have a 2.6% higher monthly income in adulthood than those whose parents did not have access to SBA. We also present evidence of several underlying mechanisms, including improved physical and mental health, better educational outcomes, and enhanced cognitive abilities. Our findings indicate that having skilled health professionals attend childbirths can result in significant long-term and multi-generational benefits. |
| Keywords: | skilled birth attendance, adult earnings, human capital, health, public goods |
| JEL: | H51 H75 I15 I18 J24 N35 O12 O15 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18719 |
| By: | Adamopoulou, Effrosyni; Galenianos, Manolēs; Giannakopoulos, Nicholas; Kammas, Pantelis; Laliotis, Ioannis |
| Abstract: | This paper documents the evolution of labor earnings and earnings dynamics in Greece during 2002-2023 using administrative matched employer-employee data from the Greek social security system. The data span the expansion of the 2000s, the deep recession of 2009-2013, and the subsequent recovery. We show that earnings, volatility, and inequality closely tracked macroeconomic conditions. Real earnings rose during the pre-crisis expansion, declined sharply during the recession (particularly among lower earners) and only partially recovered afterward. Earnings volatility and downside risk increased substantially during the crisis, while inequality rose both in the cross-section and within cohorts. Workers entering the labor market during the recession experienced unusually weak initial earnings and persistently lower subsequent earnings. Using regional variation in unemployment rates, we show that weaker local labor-market conditions at entry are associated with lower early-career earnings. |
| Keywords: | Labor earnings, Inequality, Volatility, Mobility, Administrative data, Greece |
| JEL: | J30 D31 C55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:341413 |
| By: | Aderonke Osikominu; Gregor Pfeifer; Tim Ruberg |
| Abstract: | We estimate heterogeneous returns to STEM education by leveraging relative distances to technical versus general universities in Switzerland. While individuals who choose a STEM education gain on average, a declining marginal treatment effect curve indicates positive selection on gains, suggesting that low-resistance individuals benefit the most. Through policy simulations aimed at increasing STEM enrollment and estimating corresponding policy-relevant treatment effects, we demonstrate that these policies' effectiveness critically depends on both observable and unobservable characteristics of affected individuals. Furthermore, we highlight how policies should be designed to both increase STEM enrollment and generate positive returns for targeted groups, particularly women. |
| Keywords: | Returns to Education; STEM; MTE; PRTE; Gender |
| JEL: | C26 I26 I28 J16 J24 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26160 |
| By: | Anne Brockmeyer; François Gerard; Gabriel Ulyssea; Linda Wu; Marcelo Bergolo; Rodrigo Ceni González; Benard Kirui; Andrea Lopez-Luzuriaga; Leonardo Fabio Morales; Andrea Otero-Cortés; Nadine Riedel; Matías Tapia; Tanisa Tawichsri; Verena Wiedemann |
| Abstract: | This paper studies formal employment dynamics using linked employer–employee data from eight countries spanning a wide income range from Kenya to Chile. First, we show that formality rates increase with development, both between and within countries, because more workers enter the formal sector, not because they spend more time in formal jobs. Second, formal labor market fluidity increases with development, as workers hold more formal jobs, spend less time in each job, and less time between jobs. Third, greater fluidity is associated with higher life-cycle wage growth, which is largely accounted for by within- rather than between-firm wage gains. |
| Keywords: | formal employment, labor market fluidity, economic development |
| JEL: | J46 J63 O15 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12742 |
| By: | Hu, Yan (Copenhagen Business School); Maurer, Stephan (UPF Barcelona School of Management) |
| Abstract: | Do minorities benefit from social networks? In this paper, we study this question using the historical example of China’s first modern bureaucratic organization, the Chinese Maritime Customs Service. Drawing on newly digitized personnel records from 1876-1911, we first show that the Chinese clerks employed by the service were predominantly Cantonese. Using the plausibly exogenous transfers of clerks across stations, we then estimate that a non-Cantonese (minority) clerk benefited significantly from meeting at least one colleague from his same province and dialect. Such connections led to faster promotion and a 5.6% salary increase, with even stronger effects when meeting a clerk who was either senior or of high quality. |
| Keywords: | Chinese Maritime Customs Service, social connections, wages, promotion, minorities |
| JEL: | J15 J31 J45 N35 N75 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18689 |
| By: | Leonardo Ridolfi; Carla Salvo; Jacob Weisdorf |
| Abstract: | This study examines the two earliest national industrial censuses from mid-nineteenthcentury France and finds that the adoption of steam power was associated with both job creation and wage growth. To identify causal effects, we exploit plausibly exogenous variation in sectoral complementarity with steam technology and in local energy-cost incentives to substitute steam for water power. The results contrast prevailing views that early mechanisation displaced workers and suppressed pay |
| Keywords: | Capitalists, industrialisation, inequality, labour, mechanisation, productivity, technological progress, wages. Jel Classification: I15, J42, J31, L92, O14, O33 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:usi:wpaper:944 |
| By: | Hattori, Keisuke |
| Abstract: | Does diversity in ability and in mutual concern help or hurt team performance? We study a team in which efforts may be complements or substitutes. Holding mean ability and mean relational orientation fixed, we vary the dispersion of each. In horizontal teams, where no one leads, ability diversity raises performance through specialization regardless of the task, whereas diversity in relational orientation lowers it under complementarity and raises it under substitutability—so complementary tasks call for diverse hands but aligned hearts. Holding both attribute gaps fixed, performance is strictly higher when the abler member has the higher relational orientation, and the fully homogeneous team is a saddle point. In vertical teams, where one leads and the other follows, under weak interaction ability diversity remains beneficial regardless of who leads, while the optimal placement of the more prosocial member flips with the task—she should follow when efforts are complements and lead when they are substitutes. Taken together, the results show that the two dimensions of diversity interact and must be designed jointly rather than separately. Measuring relational orientation therefore pays off in both team composition and role assignment. |
| Keywords: | team production, ability diversity, social preferences, complementarity, assortative matching, leadership |
| JEL: | D23 J24 M54 D91 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:341465 |
| By: | Mehrotra, Santosh (Higher School of Economics); Chauhan, Dr Renu (Centre for INformal Sector & Labour Studies, Jawaharlal Nehru University, New Delhi, India) |
| Abstract: | Manufacturing-led growth remains central to India’s structural transformation, given its potential to generate large-scale employment for unskilled and semi-skilled workers transitioning out of agriculture, as well as its strong interlinkages with services employment. However, the share of manufacturing in both employment and gross value added has remained stagnant. Against this backdrop, this paper analyses the performance of India’s organised (or formal) and unorganised (or informal) manufacturing during last decade using unit-level data from the National Sample Survey's Annual Survey of Industries, Periodic Labour Force Surveys, and Annual Survey of Unorganized Sector Enterprises. The findings reveal a slowdown in employment and gross value added within the unorganised manufacturing sector between 2015–16 and 2022-23, while the organised manufacturing sector recorded gains. Overall, the manufacturing sector is increasingly becoming organised with share of unorganised sector in total employment and value added reducing over the years which can pose an opportunity or a challenge, depending on the absorption of workers in the organised sector. |
| Keywords: | manufacturing, organised sector, unorganised sector, informal sector, structural transformation, employment, formalisation, India |
| JEL: | L60 O14 O17 J21 J46 O53 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18688 |
| By: | Ahmet Gulek; Christina Langer |
| Abstract: | We study the effect of the post-COVID expansion of remote work on the child penalty. Our empirical design proceeds in three steps: using pseudo-panels to estimate child penalties across occupations, exploiting cross-occupational variation in remote work adoption, and using synthetic controls to adjust for differential pre-COVID trajectories. Remote work reduces the hours penalty for mothers: each percentage point increase in an occupation's remote work share raises mothers' hours worked by 0.23%, eliminating one-sixth of the baseline motherhood penalty for the average remote occupation. We find no effects on employment, income, or wages for mothers, and no average effects on men. |
| Keywords: | Working from Home, Child Penalty, Gender Inequality |
| JEL: | J13 J16 J22 J31 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26162 |
| By: | Daron Acemoglu; A. Arda Gitmez; Mehdi Shadmehr |
| Abstract: | We consider a model of automation embedded in a political environment where workers can undertake a revolt (modeled as a global game), and greater inequality between capital and labor increases the likelihood of a revolt. Decentralized automation decisions raise the share of capital in national income and increase the likelihood of a successful revolt. A capitalist state (representing capital-owners) prefers to regulate the level of automation to lessen the threat of a successful revolt. The capitalist state can also redistribute to workers via the tax system or repress political action, thus creating greater room for further automation. We characterize the trade-off between the regulation of automation, redistribution and repression. Our main result is a complementarity between automation and repression. Unless the threat of revolt is quite weak or the capital stock is very low, the capitalist state prefers repression. A higher capital stock in turn encourages more automation and thus more repression. In our full dynamic model with capital accumulation, in the long run the economy tends to repression (again unless the threat of revolt is very weak). We also prove that the same conclusions apply when firms can additionally invest in new labor-intensive tasks. Finally, we show that, starting in a democracy, capital accumulation and thus greater automation encourages the capitalists to support a coup against democracy and set up a repressive system. |
| JEL: | J23 O33 P10 P16 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35336 |
| By: | Anujit Chakraborty; Arkadev Ghosh; Matt Lowe; Gareth Nellis |
| Abstract: | Many group identities that influence economic behavior are imperfectly observed. Individuals and institutions often conceal identity markers to limit discrimination. Yet concealment also creates uncertainty about group membership, hampering coordination in social interaction. To study this tradeoff, we paired high- and low-caste men for collaborative data entry work in North India. We randomly assigned each mixed-caste pair to either be: (i) introduced by full names, making caste common knowledge; (ii) introduced by first names only, making caste disclosure a choice; or (iii) instructed not to disclose caste. The two concealment conditions substantially reduce the accuracy of beliefs about a partner’s caste and confidence in those beliefs. They also weaken workplace relations, lowering trust, willingness to interact, and perceived productivity—consistent with identity helping structure social coordination. Evidence on mechanisms shows that identity concealment inhibits authentic interaction, making workers less able to express their “true selves, ” while certainty about a partner’s identity is associated with stronger workplace ties. Concealment leaves a sizable caste disparity in higher-status role assignment intact, implying minimal impacts on discrimination. We conclude that where group identities are socially entrenched, reducing their legibility may undermine intergroup relations. |
| JEL: | C93 D83 J71 O12 Z13 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35364 |
| By: | David R. Agrawal; William F. Fox |
| Abstract: | This paper examines how artificial intelligence (AI) reshapes subnational public finance, largely through familiar channels observed from prior technological change. Although some effects are novel, many issues surrounding the taxation of AI-related income and consumption parallel earlier challenges from e-commerce, digitalization, and remote work. AI shifts income from labor toward capital and reallocates tax bases toward consumption and market-based activity, raising questions such as the sales tax treatment of digital services. For governments, AI relaxes long-standing informational and administrative constraints in taxation, enforcement, budgeting, and service delivery, while strengthening scale economies. Cost reductions depend critically on labor-intensive sectors like K-12 education. However, government AI use may advantage larger jurisdictions with greater data access, raising equity and transparency concerns and increasing the value of interstate cooperation to harness scale economies from more data. Overall, AI reinforces—rather than overturns—the classic trade-offs emphasized in the fiscal federalism literature. |
| Keywords: | artificial intelligence, state and local public finance, digital services, economies of scale, federalism |
| JEL: | C55 H71 H72 H77 J45 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12716 |
| By: | Huebener, Mathias (Federal Institute for Population Research (BiB)); Mahlbacher, Malin (Federal Institute for Population Research (BiB)); Schmitz, Sophia (Federal Institute for Population Research (BiB)) |
| Abstract: | We study how expansions of publicly subsidized childcare affect the intra-household allocation of labor supply in early childhood, with a particular focus on fathers. Exploiting variation in the roll-out of childcare places for children under three across German counties, we show that increased availability accelerates childcare entry and maternal return to work. Fathers also adjust their labor supply: they take more parental leave and subsequently reduce full-time work, yet without significantly increasing weekday caregiving. These findings imply that childcare policies can reshape labor supply within households, leading to smaller aggregate labor supply effects than suggested by maternal responses alone. |
| Keywords: | public childcare, family policies, parental leave, paternal labor supply |
| JEL: | J13 J16 J18 J22 D13 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18696 |
| By: | Zucchini, Emanuele (Food and Agriculture Organisation); Sadania, Clémentine (rowsquared); Steiner, Susan (rowsquared); Rossi, Alessandro (International Fund for Agricultural Development); Mabiso, Athur (International Fund for Agricultural Development); Toguem, Robinson (International Fund for Agricultural Development); Mastroeni, Andrea (University of Rome Tor Vergata) |
| Abstract: | Youth employment remains a critical issue in Sub-Saharan Africa. This study examines the impact of two large-scale governmental programmes in Cameroon and Madagascar that aim to promote self-employment in agriculture. Youth participated in vocational training and received technical support, inputs and mentoring to engage in crop, livestock or non-farming agricultural activities. We employ a quasi-experimental design to estimate the impact on the income of youth-led activities, and we address the limitations associated with such designs by carefully constructing a counterfactual. Our findings indicate that these integrated training and livelihoods programmes significantly enhance income from the targeted activities. We highlight the importance of providing regular support for participants during and after programme implementation. |
| Keywords: | integrated training and livelihood programmes, youth employment, agriculture, impact evaluation, Sub-Saharan Africa |
| JEL: | D04 J43 O12 O55 Q12 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18713 |
| By: | Dan Cao; Henry Hyatt; Toshihiko Mukoyama; Erick Sager |
| Abstract: | Since the 1990s, the Bureau of Labor Statistics (BLS) has reported much more rapid growth in U.S. private sector employer establishments than has the Census Bureau– the gap reached roughly 1.6 million by 2023. Using linked BLS-Census microdata, we document two main drivers. First, a large and growing number of employers providing services to the elderly and persons with disabilities are in scope for the BLS frame but not the Census Bureau’s. Second, many firms appear with substantially more establishments in the BLS frame. These discrepancies substantially affect the measured establishment size distribution and quantitative policy analysis. |
| Keywords: | establishments, multi-unit firms, concentration |
| JEL: | E24 J21 L11 O31 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:26-36 |
| By: | Lorenzo Bozzoli (Toulouse School of Economics); Guillaume Pommey (DEF, University of Rome "Tor Vergata") |
| Abstract: | We study agency contracts where a project owner (principal) privately learns her opportunity cost of continuing the relationship after the agent’s effort is sunk. The principalcontrols the design of termination rights and faces a trade-off between preserving incentives and retaining exit flexibility. Even without legal constraints, fully flexible (at-will), fully rigid (lock-in), and intermediate contracts offering partial security and compensation can all arise at equilibrium. While some contractsmay appear to protect the agent, they are always socially inefficient, justifying targeted legal constraints on termination rights. In particular, at-will contracts always under-secure the agent and under-enforce the project and can be banned on efficiency grounds. Inefficiencies also include excessive termination payments and over-securing, suggesting both toomuch and too little flexibility distort outcomes. Finally, we characterize aminimalmandatory termination fee, as commonly seen in employment protection laws, that partially restores efficiency |
| Keywords: | Moral Hazard, Termination rights, Severance Pay, Commitment |
| JEL: | D86 J33 J65 |
| Date: | 2026–06–16 |
| URL: | https://d.repec.org/n?u=RePEc:rtv:ceisrp:621 |
| By: | Alice Chong (Graduate School of Economics, Waseda University, and Waseda Institute of Social & Human Capital Studies(WISH)); Hiroyuki Motegi (National Institute of Population and Social Security Research); Masato Oikawa (Faculty of Education and Integrated Arts and Sciences, Waseda University, and Waseda Institute of Social & Human Capital Studies (WISH)); Takumi Toyono (Waseda Institute of Social & Human Capital Studies (WISH)); Haruko Noguchi (Faculty of Political Science and Economics, Waseda University, and Waseda Institute of Social & Human Capital Studies (WISH)) |
| Abstract: | We provide causal evidence on whether working from home (WFH) enables workers to balance employment and eldercare, and how formal care infrastructure and gender norms shape this relationship. Exploiting Japan’s COVID-19-induced remote work expansion, we find striking heterogeneity: WFH increases caregiving among part-time workers with positive health effects, but among full-time employees, only women increase caregiving — and their health deteriorates. Greater formal care availability and progressive gender norms substantially attenuate these effects. Realizing the work-care balance benefits of workplace flexibility requires complementary investments in care infrastructure and progress toward gender equality. |
| Keywords: | working from home, informal caregiving, work-care balance, gender norms, long-term care, double burden, difference-in-differences (DID) |
| JEL: | I10 J14 J20 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:wap:wpaper:2601 |
| By: | Amaral, Sofia (World Bank); Chaney, Kim (University at Buffalo); Kaiser, Victoria (Bavarian Ministry of Economic Affairs, Regional Development and Energy); Prakash, Nishith (Northeastern University); Sahay, Abhilasha (The World Bank) |
| Abstract: | Police officers' discretionary handling of gender-based violence (GBV) complaints is a critical barrier to justice in developing countries. We collaborate with the Madhya Pradesh Police in India to conduct a lab-in-the-field experiment with 323 officers, studying the effect of confronting officers with evidence of their biased handling of a fictitious GBV case. We find no average effect, but sharply divergent responses by officer gender. Confronted female officers prioritize the victim's statement by 23 percentage points more than controls, a 27 percent increase relative to the control mean. Male officers exhibit a backlash: they deprioritize the victim's statement, elevate the offender's, and assign more negative stereotypes to GBV victims one week after confrontation. A likely explanation is the stark difference in baseline bias: 72 percent of female officers display only mild bias, while 51 percent of male officers are strongly biased. Because policing is male-dominated, women are more willing to de-bias their case handling while men are not. Interventions targeting officer bias must account for gender-differentiated responses to avoid unintended consequences. |
| Keywords: | prejudice confrontation, gender heterogeneity, gender-based violence, police bias, backlash, stereotype reduction, lab-in-the-field experiment, India |
| JEL: | J16 J45 K42 K14 C93 D91 O12 O15 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18699 |
| By: | Wabenga Yango, James; Moran, Kevin |
| Abstract: | This paper presents an empirical analysis of the impacts of global demographic changes on GDP growth. It categorizes countries into advanced, emerging and developing economies and conducts the analysis region by region. The first results pertain to a decomposition of per capita GDP growth into its main contributors. They show that in advanced economies, productivity per hour and total hours worked are the main contributors to GDP per capita growth. In contrast, productivity per hour and an expanding working-age population in emerging economies are important for GDP growth. Finally, in advanced economies, hours worked per job have fallen and thus have a negative effect on GDP per capita growth. The second results are obtained from panel models that estimate the impact of demographic trends on GDP per capita growth. This analysis is once again conducted region by region and one demographic (aging, fertility, life expectancy, immigration, etc.) and growth in GDP per capita at a time. The results notably report that larger proportions of older adults positively influence GDP per capita growth in emerging and developing economies, whereas this ageing has a detrimental effect in advanced economies. The findings indicate that shifts in the working-age population positively impact GDP per capita across developing, emerging, and advanced economies, whereas changes in the youth population have a negative effect on GDP per capita in these economies as well. Finally, net immigration increases GDP per capita growth in advanced and developing economies, but it decreases growth in emerging economies. These findings contribute to the ongoing debates about the macroeconomic consequences of demographic shifts and highlight the importance of conditioning the analysis on the region or the stage of economic development. |
| Keywords: | Demographic trends; International migration; Economic Growth |
| JEL: | E2 F22 F41 J11 J21 O47 |
| Date: | 2025–06–25 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:129481 |
| By: | Rui Castro; Jiyoung Kim; Fabian Lange; Jérôme Larivière; Markus Poschke |
| Abstract: | A small group of people accounts for a large majority of flows between labor market states and of spells in un- and non-employment. In this paper, we ask whether it is possible to identify those weakly attached to the labor market during their prime working-age years using information available early in their lives. First, we use information on labor force transitions between ages 30 and 50 contained in the long panel provided by the NLSY79 to identify those weakly connected to the labor market during their prime age. To do so, we use k-means clustering on moments describing observed spells in employment, unemployment, and non-employment between 30 and 50. This points to a group of less attached individuals who are disproportionally female, less educated, and in poor health. In a second step we predict, using information collected at various points before age 30 - which we do not use in clustering - whether individuals will turn out to belong to the weakly attached type in their prime age. We find that information from ages 22 to 29 allows predicting membership of the low-attachment group with high precision. Particularly influential is information on early labor market experiences and health. The fact that we can predict weak and strong labor market attachment during prime working age using variables observed in individuals' twenties suggests the presence of persistent heterogeneity that shapes labor market experiences throughout the life cycle. |
| Keywords: | Labor force attachment, Clustering, Type prediction, Health, Early intervention |
| JEL: | J0 J21 J64 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26164 |
| By: | Naoki Aizawa; Hanming Fang; Katsuhiro Komatsu |
| Abstract: | We study the labor market impacts of unions by accounting for their effects on employers' insurance provision and examine how social insurance policies, in turn, affect unionization and labor market outcomes. We document that unions increase employer-sponsored insurance provision and that expansions in social insurance reduce unionization in the United States. We then develop and estimate an equilibrium labor search model where unionization, wages, and non-wage benefits are endogenously determined. We demonstrate that unionization, as well as the threat of unionization, increases employer-sponsored insurance provision in both unionized and nonunionized firms. We find that social insurance policies can affect labor market inequality through (de)unionization, and inequality may increase or decrease depending on how social insurance is targeted. Social insurance expansions, along with technological changes, contribute to the long-term decline of unions in the U.S. in the last fifty years. Although historical deunionization driven by these forces increased overall welfare, we find that subsidizing unions in the current economy can improve welfare. |
| Keywords: | Labor unions; Non-wage benefits; Employer-provided insurance; Social insurance; Technological change |
| JEL: | J42 J51 J52 I13 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:crm:wpaper:26167 |